Russia has declared that the SWIFT ban, which has been implemented recently, is equivalent to the declaration of war. So why is SWIFT so important?
Tensions between Russia and the rest of the world continue to rise. The process that started with the occupation of Ukraine continues with the embargo imposed by the USA, the UK and the European Union. Finally, the Kremlin, which received the biggest blow by removing it from the SWIFT system, responded quite harshly. “
Speaking about the economic damage that SWIFT, which is among the new economic sanctions options, will cause the country, the Kremlin announced that it is equivalent to the war declaration. The tension, which escalated after the announcement, asked, “Can the war get bigger?” brought the question to mind. So why is SWIFT so important?
Why is SWIFT so important?
SWIFT was launched in 1973 by the Belgium-based Society for Worldwide Interbank Financial Telecommunication. This financial transfer system is a protocol that accelerates international transfer transactions in foreign currency.
The exclusion of Russia from this system will completely interrupt the country’s access to international financial systems. This means almost collapse, especially in economic terms. Unfortunately, there is no alternative that can replace this popular system.
Banks in Russia can use traditional methods such as email to make international payments. However, this involves significant risks in terms of both time and security. This can result in a significant reduction in transaction volume and increase in costs.